July 11th, 2012
09:43 AM ET

Will higher taxes in France help or hurt its economy?

In his plans for helping France's economy turn around, new President Francois Hollande has pledged to increase the rate of income tax to 75% for those residents making more than 1 million euros a year.

The plan is back in the spotlight in Hollande's recent visit with UK Prime Minister David Cameron. Cameron has said the tax hike would drive businesses to Britian - which he joked he'd welcome with open arms - but the French leader denied such an effect.

How does a 75% top rate of tax compare with other leading economies?

• In Great Britain next year, tax on earnings over $230,000 will be cut from 50 to 45 percent in an effort for some stimulus there, according to the Chancellor of the Exchequer.

• In the United States, the top rate of federal income tax is 35%. Do remember, though, state income taxes could add up to 11% on top of that.

• In Germany, taxpayers have a top rate of 45%.

• In Japan, including local taxes, the top rate is 50%.

How will higher taxes in France help or hurt its economy? Peter Morici is a professor of international business at the University of Maryland, and previously, he served as Director of Economics at the U.S. International Trade Commission. He talked to CNN recently about what to expect in the following edited version:

CNN: Hollande is looking to cut about $10 billion off the budget deficit. There's only about 3,000 households who earn over a million euros in France. Does this really matter? Is this a bad thing or a good thing, do you think?

MORICI: If it drives those households to Britain, it is a bad thing for France, and it sends a terrible message abroad that France is not very hospitable to profits and to people who are entrepreneurs and so forth.

It won't have a positive effect. This is not, for example, Sweden, where there's a consensus for high taxes and where people have confidence the government is run well. In France, they're doing this because the government isn't run well.

CNN: Somebody has got to pay for these economies to get themselves out of the messes that they're in, and in France, Hollande says that should be those who are earning over a million dollars plus. If you go back to Economics 101 and the The Laffer Curve theory, isn't there a point at which it's just exiles looking to jump from the country? That there is a point at which theory tells us that you can tax people too much?

MORICI: Absolutely. In America, the taxes are much higher than you even describe, because we have an enormous estate tax. So, older Americans, like myself - I pay 50 cents on the dollar with estate tax on everything I earn, and then I put it in the bank. I'm not going to use it.

Now, I'll die in a few years, maybe 10, 15 years, and my son and daughter will inherit it, and they'll pay another 55 percent if the Bush tax cuts expire. So, for every dollar I earn, in the end, my heirs get 25 cents? It discourages a lot of older people from investing and taking risk, and they're the ones with the capital to do it.

CNN: Where do you see Europe headed going forward? Are we going to see a sort of tax-and-spend initiative? The sort of pump priming these economies in a sort of old-style Keynesian way? Or will we be looking for a much leaner way of doing this, do you think?

MORICI: In the near term, I think that France is going to be in the lead. There's a sense that austerity has gone too far. But I want to be careful not to put Europe all in one basket. Britain is not inside the eurozone and so forth.

However, the debt inside the eurozone is really burdensome. Long term, I don't see how the Mediterranean economies, the four big Mediterranean economies, can become viable without about a 50 percent write-down on their debt.

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Topics: Economy • Europe • France

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soundoff (133 Responses)
  1. Conrad Shull

    First, Hollande is nothing but a shameless panderer. Second, look for the immediate and inexplicable shrinkage in the number of French millionaires.

    July 11, 2012 at 3:40 pm | Reply
    • StevenR

      Nope. Won't make a difference. It is not as easy as you think to just cut and run. Taxing the rich is the equivalent to cutting social welfare benefits for everyone else. AND THE RICH ARE NOT JOB CREATORS. Get that fantasy out of your head. All the excess money the rich have goes to creating speculative bubbles that do not help anybody. It makes 1000 times more sense to use the excess capital – and it really IS excess – than to have rich jerks gamble and create another bubble.

      July 11, 2012 at 4:34 pm | Reply
      • jas

        Why don't you tell my employees that rich people don't creat jobs. My employees make well above average salaries and benefits and enjoy their jobs. I have 3 companies because I like the challenge of building companies. But now I am done. I will no longer take the risk of losing substantial sums of money in the hope of making 20 cents on the dollar after estate taxes. That just adds more people to the unemployment lines.

        July 11, 2012 at 5:06 pm |
      • Dentate

        Interesting. I am one of the 1%. I own a small airplane. I pay property tax on it; I pay for the hangar, including taxes that support the local water and school districts; I get it inspected, and pay hefty fees for that; it needs regular maintenance from the local airport mechanic, etc. Next year the Bush tax cuts will expire. I will no longer be able to afford the plane. FIne, I will sell it (at a loss–I owe more to the bank than it's worth)–and all those tax payments I make to the county and cities, plus all the business for the mechanics, airport staff, etc, etc, will all go away. Sure it's a toy. Made in America. Supporting American towns and American jobs. Now, tell me again how taxing the "rich" doesn't hurt jobs.

        July 11, 2012 at 5:29 pm |
      • Harry Callahan

        Jas, arent you the greeter at WallMart?

        July 11, 2012 at 5:48 pm |
      • tax inequality

        StevenR: there are a great many people who have worked very hard building themselves and their businesses up from scratch. Some of them have eventually turned a handsome profit as they also supported all their employees. These people have also frequently and wisely saved their money and invested it in stocks controlled by various banks so you and yours can actually get a loan backed by THEIR capital. I am not one of these people but I know quite a few. I also work very hard and save money but I chose scientific research, which is abysmal for earning money. I appreciate the hard work of others and they deserve to keep a substantial amount of their earned profit even as they contribute much more to federal, state and local coffers than others. Heck, 45% of U.S. workers don't even pay Federal tax and yet they use the same services as everyone else. Want to whine about people paying taxes? How about the non-paying 45%?

        July 11, 2012 at 5:48 pm |
      • HannitysDog

        To jas and Dentate
        Good on you. Good luck making 20 cents on the dollar with your basic savings account. Sell the plane and walk (or take public transit). Simply put, if the 1% were doing such a great job, there would not be so many people looking for assistance. So close your business(es) and sell your plane. If there's demand left in the economy, there will be 20 other people come in to take up the slack and some other real entrepreneur will buy the plane and start an airline.

        The only thing missing in your comments, is what a great country America is (except for the people who live in it, whom you obviously despise).

        July 11, 2012 at 5:55 pm |
      • tom

        "Heck, 45% of U.S. workers don't even pay Federal tax and yet they use the same services as everyone else. Want to whine about people paying taxes? How about the non-paying 45%?"

        My guess is that most of those people who don't pay taxes are dirt poor. Eating balogna sandwiches and beans. And you want them to pay taxes? Hell, better you suggest we round them up and put them in slave labor camps. I just love boneheaded comments like yours.

        July 11, 2012 at 9:02 pm |
      • Guest

        Seems easy enough. CNN runs a new article every week on a prominent person who's renounced US citizenship. It's nothing but an arithmatic problem. If it costs more in new taxes than it will to move the money, which do you think they'll do?

        The secret isn't to tax more, it's to SPEND LESS.

        July 12, 2012 at 12:11 am |
      • Unbelievable


        So you pay for all of these excesses that truly are not needed, and that you apparently could not afford out of your own pocket, but yet you feel that paying 3% more on your income taxes is burdensome and will force you to give up your rather unearned luxuries, and you also think that your rather insignificant contribution to circular economics will cause hell fire and brimstone because you'll have to take a loss on an airplane loan?

        If you make enough money to where 3% more in INCOME taxes will prevent you from keeping up on payments for a plane and all related services, then I just consider you dumb for not using the various loopholes to turn your rather generous income into CAPITAL GAINS and get taxed at only 15% max.

        July 12, 2012 at 1:19 am |
      • j. von hettlingen

        France's political system is a malaise to the country's economy.

        July 12, 2012 at 2:55 am |
      • gager

        So, you are staking a claim to money that is not yours? That's theft. If it's not your money then you have no right to how it is spent.

        July 12, 2012 at 6:02 am |
      • CalDude

        I've never known a poor man creating jobs....
        Do you even know what it takes to start a business in the United States now?
        In some cities you can't even start a lemonade stand without the authorities butt'n in.

        get a clue to what is going on in our country, man.

        July 12, 2012 at 9:34 am |
      • bob

        I see that the wealthy t baggers are out in force today whining about taxing the rich. Actually, taxing the rich is fair and it leads to improvements in all areas of society. I am sick and tired of these selfish people lying everything. Hollande is doing the right thing.

        July 12, 2012 at 9:42 am |
      • d

        Your right, Bill Gates, Steve Jobs, Warren Buffet and Oprah do not create jobs at all either by growing their empires or by lavish spending themselves. Poor people like StevenR who make minimum wage are job creators I guess.

        July 12, 2012 at 9:46 am |
      • Tracy

        Real Job creation is the upper middle class trying to become rich...What is destroying this country are the mega-too big to fail – buying off our government -corporations that pay less then their fair share. They are putting the American Entrepreneur outta business then move their assets offshore. You can complain about your small business tax burden and we agree. You may not like it, but you are in the same bucket with the rest of us "parasites," you are not the top of the food chain. You are in our camp.

        July 12, 2012 at 10:23 am |
      • Jeff G.

        If you are keeping .25 on the dollar you are too stupid to run a business, or are overpaying a very, very bad accountant. .

        July 12, 2012 at 10:30 am |
      • GreedKnight


        July 12, 2012 at 10:52 am |
      • GreedKnight

        @tax inequality
        you make an interesting point about the bottom 45%. So essentially when it comes to federal taxes the middle 54% are getting screwed by the top and bottom through tax shelters and those not even paying taxes.

        July 12, 2012 at 10:57 am |
      • Conservative

        I don't think the 1% have a problem with paying more money, they have a problem with paying that money to the federal government which is notoriously inefficient and horrible with money. What do people judge when they give to charity, how much of that money goes to the goal of the charity. The federal government is inefficient and why would you then want to pay them. I bet if you said to the top 1% we are going to tax you all an extra 5% which is going straight to pay the debt down, or will go STRAIGHT to help the poor and services for them, many would not care. Its the fact that it will be going to huge bureaucracy.

        Also, idiots who are hounding detante. Yes his plane would be what created the jobs and requires the money. And yes somebody will probably buy it. But i bet it will be a lower cost, and then the taxes on the plane will go WAY down and thus the county and local government will not get the money.

        It is also just absurd that some of you think the 50% of the working people who pay no taxes are "dirt poor." Some of them are and honestly those shouldn't pay taxes. But the key is that everybody have skin in the game. Make them pay something, say 100 bucks a year. My wife is a teacher at an inner city school and the parents of her kids who are on free and reduced lunches have nicer cell phones than I do and I am an attorney. Maybe those "dirt poor" can cut back on their minutes and pay 10 bucks a month for taxes.

        WE ALL have to step up to get this country out of the mess of spending the government has put us in.

        July 12, 2012 at 12:38 pm |
      • terry

        @Jas It's a good story! Found anyone yet that believes it?

        July 12, 2012 at 12:53 pm |
      • Chris R

        The thing is that rich people think they create a lot of jobs but they simply don't have the same aggregate purchasing power. Think about it this way – who spends more money? 1 guy that makes a million dollars a year or 2,000 that make 50,000 a year? It's going to be the 2,000 people – they are the ones that create the demand that supports the business of the millionaire along with the small businesses of gas station owners, restaurants, convenience stores, hair salons and so forth. The 2,000 create far more jobs through their spending than the single millionaire. The middle class (and the poor as they spend money too) are the real job creators.

        July 12, 2012 at 2:40 pm |
      • Chris R

        @Conservative – those people are paying taxes. For example, look at their cell phone plans. They all include excise fees and taxes. Every time they buy something they are likely paying sales taxes. They are also paying local and state taxes. They may not be paying federal income taxes but they are paying taxes. Oh, many of the people at the upper end of that income range are not paying taxes because of the combination of dependent deductions and child tax credits. If you eliminate the child tax credit far more people would be paying taxes. Of course, that would also mean that you might be paying more taxes as well ($1000 per child). Would that be alright with you? Personally, I'm in favor of eliminating the child tax credit completely. No reason why anyone should be getting a tax credit and deduction for the same dependent.

        July 12, 2012 at 2:46 pm |
      • rp

        StevenR your thinking is right in line with the theories that resulted in the failed communism experiment of the Soviet Union. Before you get too entrenched in your ideas, you ought to do some studying so you can understand what happened to the Soviet goal of evenly distributing the wealth. The bottom line is – it just doesn't work. It kills the path to success. Think about the fact that cars, airplanes, radios, telephones, computers, and many more important inventions were all either invented or developed here (or in some other free market economy). None of those things were invented in the Soviet Union. So we don't want that here in America ever. We don't want to burden our best people with supporting the masses until that is all they work to do. We want smart successful people to rise to the top reap their just rewards while building our future.

        July 12, 2012 at 4:06 pm |
      • jasoncatalyst

        The rich are not job creators. Demand is a job creator. When someone wants a private plane, like Dentate up there, they create demand. When 10 poor people want some basic transportation, they create demand. If you want to alleviate poverty, do you buy Dentate a plane and support workers in the plane factory, or do you buy 10 people transportation so they can get to a job easier, release stress easier, and work on entrepreneurial pursuits easier?

        Profits are taxed. You don't tax a business that is losing money. So what are profits? Profits are the excess someone was able to manipulate from the system on top of the costs of doing business. A living wage for the owner is taxed at the same rate as every other worker. If the owner exploits their workers and customers well enough, they will become rich. At that point they are a parasite on the wealth of their community and the simplest recourse is to tax extreme income at a high rate.

        So why not raise the minimum wage and redistribute that way? A certain minimum is necessary, but for the most part a higher minimum wage will be a tax on both profitable and struggling businesses. Taxing actual profits is not a burden to the business. At that point the business has said... "We are doing so well that we can afford to pay this person $1,200/hour." I don't think that business has a taxation problem. I think they have a rich parasite problem.

        July 13, 2012 at 3:56 pm |
      • Rick

        To those of you who consider yourselves "job creators" because you own a company, I would like an honest answer to this question (be honest with yourself at least): Have you ever hired someone simply because you had extra money, even if demand for your product or service did not require it? The purpose of capitalism is not to create jobs. The purpose of capitalism is to make money. No capitalist interested in profit maximization is going to add a new job to the payroll unless they believe that job is necessary to keep up with demand. It's simple economics and as business people you should understand that. Jobs are created by demand for a product or service. Demand is created by people wanting a product or service and having the money to buy it. Jobs are created when the middle class spends, not because some wealthy person has nothing better to do with their money and decides to be benevolent and add an unnecessary job.

        July 14, 2012 at 10:27 pm |
    • Steve M

      Tax the rich, right? What that means is taking money earned by wealthy individuals and giving it to the government which will then distribute it to poorer individuals through social programs, etc. Why is that okay with everyone? Do you like living off of handouts from rich people? Does it feel less bad because you are getting it from the government forcing them to pay it instead of them handing it directly to you? It is the same thing. Ahh, but you pay your taxes too, right? The truth? Only about 50% of people who work actually pay federal taxes. Sad but true reality.

      Imagine if taxes were like grades earned in school. Imagine you got an A but the teacher came and told you that Susie has a tough life and has only earned a D, and she needs you to drop your grad to a B- so that Susie can earn a C+. It was your grade. You earned it. But now you have to share it with someone else who didn't work as hard. That's how people who actually pay taxes feel about social programs. They know we all need roads, and schools, and defense, and infrastructure, etc. etc., but they don't appreciate people taking their hard earned money so they can be lazy bums in life.

      July 12, 2012 at 1:50 am | Reply
      • j. von hettlingen

        A country with a stable economy has also a stable fiscal policy. The latter shouldn't be used as a political instrument, as it could be a double-edged sword. Hollande will learn the lesson.

        July 12, 2012 at 3:00 am |
      • k8br

        Steven, you don't think it is all right for government to take taxes from the rich and give it to those less fortunate? It has been like that for at least 50 years!! Why all of the sudden is this such a horror story?? The so called 50% that don't pay taxes, don't pay taxes because their income isn't enough to pay taxes!!! You try living on $20,000 a year and see how much your needs (not wants) cost, and then you are still expected to pay even 10% in taxes?? Believe me, I am not part of the 1% nor am I living on $20,000 annually, but I have been that low. I helped myself by getting two college degrees and now I am part of the middle class and how come I don't begrudge those that don't make enough to pay taxes? How come it is only those that can most afford to help that are screaming about it???

        July 12, 2012 at 12:53 pm |
      • wartan

        If that's what it takes Susie to get a job after she graduates and have an income to come to my supermarket and spend money on groceries, then yes, why not? We all depend on each other. How do you think the rich got rich? They own businesses that ordinary people buy things from. If I'm a multimillionaire because I own a supermarket, why should I be against being taxed an extra 5% so that the poor folks can get some food stamps to go shop at my stores?

        July 12, 2012 at 2:31 pm |
      • Chris R

        Let's change your analogy a little bit. You get an A and Susie gets a D. The teacher wants you to give up part of your grade to Susie. If you don't Susie will be beaten severely. Then Susie will take out her anger at being beaten on you by stealing all of your pencils and burning your desk. Are you still unwilling to give up part of your grade? Seriously, part of the reason we provide a minimum level of support to the poor is to keep them from starving and becoming desperate. Desperate people do dangerous things. Things that could be harmful to the people who got all of the good things in life. I know, that sounds soooo melodramatic but the modern welfare system was created, in part, precisely for that reason. You need to look back to history as to what happens when the poor lose all hope. It's not good for the stability of any society (CF the revolutions of 1848, the French revolution, the Russian revolution, the social unrest and riots in the US in the 1930s, food riots, etc).

        July 12, 2012 at 2:53 pm |
      • Larry

        when my parents were children multi millionaires and the rare billionaire paid 50% or more in taxes and people had jobs with benefits and the rich people were still rich. get a clue

        July 13, 2012 at 2:18 am |
  2. Yes


    July 11, 2012 at 3:55 pm | Reply
    • Are you a Yes Man?

      Can you say Splunge?

      July 11, 2012 at 3:56 pm | Reply
      • Harry Callahan

        Well said Monty!

        July 11, 2012 at 4:35 pm |
      • Interviewer

        Yes, if I may just cut in on you there, Herr Gambolputty de von Ausfern- schplenden- schlitter- crasscrenbon- fried- digger- dingle- dangle- dongle- dungle- burstein- von- knacker- thrasher- apple- banger- horowitz- ticolensic- grander- knotty- spelltinkle- grandlich- grumblemeyer- spelterwasser- kurstlich- himbleeisen- bahnwagen- gutenabend- bitte- ein- nürnburger- bratwustle- gerspurten- mitz- weimache- luber- hundsfut- gumberaber- shönedanker- kalbsfleisch- mittler- aucher von Hautkopft of Ulm, and ask you – just quickly – if there's any particular thing that you remember about Johann Gambolputty de von Ausfern- schplenden- schlitter- crasscrenbon- fried- digger- dingle- dangle- dongle- dungle- burstein- von- knacker- thrasher- apple- banger- horowitz- ticolensic- grander- knotty- spelltinkle- grandlich- grumblemeyer- spelterwasser- kurstlich- himbleeisen- bahnwagen- gutenabend- bitte- ein- nürnburger- bratwustle- gerspurten- mitz- weimache- luber- hundsfut- gumberaber- shönedanker- kalbsfleisch- mittler- aucher von Hautkopft of Ulm?

        July 11, 2012 at 9:44 pm |
  3. Jon

    If the amount people in the US pay for health insurance was converted to a tax rate, what would the tax rate for the US be?

    July 11, 2012 at 4:01 pm | Reply
    • victim of democrat hypocrisy

      Don't forget to add in taxes for Social Security and Medicare–money you'll never see again if you're under age 50.

      July 11, 2012 at 4:06 pm | Reply
      • Victim of muslim hate and ignorance


        July 11, 2012 at 4:36 pm |
      • jay crandall

        Ah, poor baby- Would you like some cheese with that whine? American tax rates for the wealthy are at an all-time low. Yes, we need to spend less, and control our spending. We could start by making Congress pay into Social Security(like everyone ELSE does) instead of having their own version which WE fund. Then make it mandatory for congress to meet their time constrained votes or else they receive NO pay. Hey, WE aren't allowed to walk away from our jobs and still get paid for NOT doing them...

        July 12, 2012 at 5:35 am |
  4. victim of democrat hypocrisy

    Some day European politicians might learn that a Robin Hood complex of super-taxing the rich to spend money on the poor merely makes everyone poor. Greece is learning that lesson right now.

    July 11, 2012 at 4:04 pm | Reply
    • Brent Slensker

      The Super Wealthy Rich in Greece NEVER paid their share and still won't, but they'll ride the backs of the poor/middle class...THAT is what Greece is learning....

      July 11, 2012 at 4:18 pm | Reply
      • j. von hettlingen

        The Greeks that Aristotles and Socrates knew, inspired the philosophers to do a lot of soul-searching and to find out more about human nature. The ancient Greeks were not different from the modern ones.

        July 12, 2012 at 3:17 am |
    • John

      Who decides what is the fair share that the rich should be paying? You?

      July 11, 2012 at 4:31 pm | Reply
    • tax inequality

      In Greece, nobody paid their fair share and everybody was dipping into the coffers for personal gain. Graft is a national pasttime in Greece.

      July 11, 2012 at 5:51 pm | Reply
    • IO

      Lack of tax revenue is what led to Greece's problems! That and overly ambitious military spending. Sound familiar?

      July 12, 2012 at 10:54 am | Reply
  5. DrEvil

    France is doubling down on all the mistakes of the past 50 years. Look for the decline in Europe to accelerate as thy run out of other people's money.

    July 11, 2012 at 4:14 pm | Reply
    • StevenR

      Actually, all these countries should now go after Germany for reparations. The Marshal Plan spared them from paying after WWII but now that Germany looks to BUY the rest of Europe, we may need to remind them of their evil past...

      July 11, 2012 at 4:44 pm | Reply
      • CalDude

        Yeah, lets penalize success....

        It's not Germany's fault that everyone else is more screwed up than them.

        stop being jealous of other people's success, idiot.

        July 12, 2012 at 9:42 am |
      • look at WW one

        Idiot, reason why Marshall plan was put in place was because Germany had to go to war again so it could get out of its crippling economy that paid the countries that defeated it in the first WW. Don't forget, USSR remorselessly subjugated eastern Germany for 40 years killing people they didn't like because they could. Next time please look at reasons why plans are put in place.

        July 12, 2012 at 10:10 am |
      • j. von hettlingen

        The problem with France's political leaders in the Fifth Republic is that they all – including the first socialist president François Mitterand – had seen themselve as another Louis XIV or Napoleon. The new president François Hollande is modest and – sofar – an exception. France practises statism, yet it has a rebellious populace.

        July 15, 2012 at 5:24 am |
  6. Romulan

    Technically this will work. For making math easy let's assume people making under 1 million pay zero taxes. If you are making one million euros per year you're not better off than people making 250,000-999,999 euros. So probably you should ask for huge pay cut to reduce your income below 1 million euros. Otherwise you have to make more than 4 million euros per year to have more after-tax money than those making 999,999 euros per year. Companies will have no reason to pay anyone between 1-4 million euros per year. Companies could end up with a lot more profit which means French government will get more in corporate tax.

    France should put this to work.

    July 11, 2012 at 4:22 pm | Reply
    • StevenR

      "For making math easy let's assume people making under 1 million pay zero taxes."

      NO. That makes the results WRONG. Do the math. Or are you a member of the GOP and therefore NEED easy math?

      July 11, 2012 at 4:42 pm | Reply
      • Romulan

        Ok, so let's not assume anything. But your math is terrible so it's going to get really complicated. Do you know the tax rate of people making less than 1 million euros in France? We need that information. Right now we can onlly assume there is a huge difference in tax rate for those making 1 million and over, and those making 999,999 and below. Usually with the extreme tax rate out to squeeze a group of rich, there is a sweet spot. I'm pretty sure if you make 1.1 million euros you will end up with less take home money than people making 0.9 million euros. Again, without the tax rate below 1 million we don't know exactly how much.

        July 11, 2012 at 5:13 pm |
    • R Decker

      I believe the current top rate in France is 60%, but that aside, your scenario is flawed. If, as you say, the rate below 1 million euros is zero and if you made say 1.1 million euros then your tax would be 75,000 euros or 75% of the income OVER 1 million because the rate for earnings below 1 million would still remain ZERO%.

      July 11, 2012 at 5:52 pm | Reply
    • JRYDAF

      I'm going to assume you are a child, which is why you don't understand how progressive tax systems work. You do not end up with less take-home than someone earning less than you. You are just paying a higher percentage on every euro over 1,000,000.

      July 11, 2012 at 6:53 pm | Reply
    • wartan

      Wow, what a dummy! The higher rate kicks in for anything earned over one million euros, not all of it. this is how the GOP scares off people. They make is sound like somehow it's better to earn less than to earn more. Someone who earns one million euros will still end up with more money in their pockets after taxes than someone earning 999,999.

      July 12, 2012 at 2:39 pm | Reply
  7. Klingon

    Only a cheater would think of this scenario.
    There are audit processes going on all the time.

    July 11, 2012 at 4:41 pm | Reply
  8. PaulC

    And yet, the number of millionaires and billionaires grow every year.. Being super wealthy is such a burden...sigh.

    July 11, 2012 at 5:34 pm | Reply
    • Harry Callahan

      You will never know.

      July 11, 2012 at 5:56 pm | Reply
      • Rickard

        You feel lucky, punk?

        July 11, 2012 at 6:01 pm |
      • Harry Callahan

        I know what you're thinking. "Did he fire six shots or only five?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

        July 11, 2012 at 6:57 pm |
  9. kc

    Hollande"s plan is probably more of a statement than an attempt to actualy raise a lot of capita,because it will not.It is no secret that once wealthy, individuals often move to countries with lower rates.1500 US citizens are doing this.The real key is bollstering the middle class while not allowing billion dollar corporates to hijack power. I will always be amazed how citizens( within any nation) have so many special interest groups,but are so mesmorized by wealth, they vote along with ideas that politicaly work against the middle class.Hollande is at one extreme end of the spectrume,and lobbyist power ,and wallstreet bonuses in the US are at the other ,and real production and capitalism get crushed in the middle.

    July 11, 2012 at 5:43 pm | Reply
    • Harry Callahan

      and muzzies?

      July 11, 2012 at 5:58 pm | Reply
      • Hahahahahahahahahahha

        "alive...alive...oh" Hahahahahahahahaha

        July 12, 2012 at 9:08 am |
  10. R Decker

    Morici must be misinformed on the estate tax as it currently exists, or rather doesn't. It has nothing to do with the Bush tax cuts being extended or otherwise expiring. At the end of 2010 law was passed that set the estate tax at 35% for everything above $5.12 million. If congress does not revisit the law by the end of 2012 it will revert back to 55% of everything above $1 million. My guess is it will be revisited and meet somewhere in the middle.

    July 11, 2012 at 6:03 pm | Reply
  11. Eric

    This article is a load of crap. Let's begin listing some of the most ridiculous parts of it:

    1) You can't compare the top tax rates between countries because the effective tax rates are often wildly different from the actual tax rates. For example, conservatives often decry the high 35% US corporate tax rate, yet the rate corporations actually pay on average is closer to 14%, and dropping year after year as they write themselves new loopholes and subsidies constantly. Many fortune 500 companies pay zero income taxes on their profits, or even negative rates.

    2) I could never understand people who complain about the estate tax. You're DEAD. This tax doesn't effect you. And because the limit where it kicks in has been raised to such a high level, it doesn't affect family farms or businesses any more. So some rich kids have to pay the taxes that their parents avoided their entire lives (see point #3), big deal.

    3) Very rich people like Mitt Romney and Warren Buffett pay much lower rates (half or less) than their secretaries. So the top tax bracket is not relevant to the ultra-rich, as they can use lower rates on investments instead of the higher rates on salaries.

    July 11, 2012 at 6:34 pm | Reply
    • volsocal

      1) There are no subsidies in the tax code for large companies. There is one in the US Code for a Brizilan oil company. Don't confuse writeoffs (tax deductions) with subsidies (getting a government check like Solyndra).

      2) It's not the government's money.

      3) Capital gains taxes (positive returns on one's own money risked in an investment) are applied at a different rate than income taxes. That is not the investor's fault, a nd they deserve no punishment for it.

      July 12, 2012 at 12:07 am | Reply
  12. David

    What the article failed to mention is that there is actually income equality in France, so the majority of the citizens control the wealth. That's why increasing taxes on the 1% won't make to much of a difference. But that should work well in the United States.

    July 11, 2012 at 9:07 pm | Reply
  13. Nostradame

    This will lead us to the demise of several societies as we know it. Raise the taxes for the rich – they take their business else where. Slowly killing all hopes of any kind of recovery

    July 11, 2012 at 9:26 pm | Reply
  14. tensor9

    CNN, shame on you! What a completely biased video. You presented absolutely none of the benefits of higher taxation on the rich. You only gave a voice to the ridiculous "rich people will move" and "it'll hurt small businesses". The same tired arguments heard here in the States. Our media is just terrible. Terrible.

    July 11, 2012 at 10:23 pm | Reply
    • foldzan1

      Benefits? Higher taxes are RARELY beneficial.

      July 12, 2012 at 9:18 am | Reply
  15. dcpintx

    Until the government stops spending (actuallly wasting) the tax revenue – they can never tax us enought to suit them. We need to get them back to doing what they are supposed to do and leaving the rest to the states.

    July 11, 2012 at 11:22 pm | Reply
  16. volsocal

    "There's a sense that austerity has gone too far." Both weeks of it?

    July 11, 2012 at 11:57 pm | Reply
  17. volsocal

    Like us, the French will get what they voted for (not that they had a better choice). Tax the rich. Spend, spend, spend. Start buying votes for the next election the first day in office. To heck with tomorrow.

    July 12, 2012 at 12:11 am | Reply
  18. James

    A flat tax rate of about 19% for individuals and corporations will bring in more revenue than the present system. Of course, all tax loop holes should go and personal tax free exemptions should be in place to help lower income families and individuals. Offshore income should not be exempt. Places with flat tax rates are in great financial shape e.g. Hong Kong.

    July 12, 2012 at 1:10 am | Reply
  19. viknat

    Don't ya just love how Liberals want you to pay more taxes to support GSA parties among numerous other pork barrel projects. Better idea get the government to run on a budget and not a credit card

    July 12, 2012 at 8:41 am | Reply
    • Hahahahahahahahahahha

      And just what money does the GOP use on their borrow and spend schemes? Hahahahahahahaha.

      July 12, 2012 at 9:10 am | Reply
      • Steadfast Muslim Jihadist


        July 13, 2012 at 11:05 pm |
  20. foldzan1

    If a person making 1 million per year is taxed at a 75% rate... how much $$$ does the government get??? The correct answer is NOTHING because no one is going to work for .025¢ on the dollar. They will stop working or move to a country that allows them to pursue their dreams.

    July 12, 2012 at 9:11 am | Reply
    • justagurlinseattle

      If a person making 1 million per year is taxed at a 75% rate... how much $$$ does the government get??? The correct answer is NOTHING because no one is going to work for .025¢ on the dollar. They will stop working or move to a country that allows them to pursue their dreams.


      are you REALLY that ignorant????

      let me simplify this for you....

      If somebody is making € 1. Million Euros.... they are taxed at the same rate they were taxed before....
      if that somebody make €1.Million and 1 euro... meaning they make € 1. more.... they will ONLY be taxed on that ADDITIONAL Euro.... NOT all of the Earnings will be taxed at 75%... only earning OVER the 1 million mark....

      also... may I point out, that had that person making a Million Euros... had they NOT been in France.... they most likely would not have had the same success.... just look at all of the LOW tax countries.... they don't seem to be churning out a bunch of millionaires and billionaires, or any inventors for that matter......

      lastly.... People will NOT leave FRANCE to avoid these taxes.... that is just silly....

      and as far as USA Millionaires leaving to avoid taxes.... well, the USA taxes EXPATS.... even if you become a citizen of another country.... the USA still taxes you.... so, renouncing citizenship to avoid taxes will not work....

      also... some of you millionaires out there sure think a LOT of yourselves..... YOU think you would have had the same success had you been in a different country such as Mexico???? or The Democratic Republic of Congo????

      Most people with success got that success because of WHERE they were and how hard they worked.... NOT ONLY because of how hard they worked....
      like I said.... Had you been in a different country.... you would NOT have had the same success....

      my household is in a top tax bracket in Sweden.... we pay 55% in taxes.... We don't mind this for a few reasons... we have enough money... we live in a SAFE Environment.... and because others at the bottom are not in as bad of shape.... we we have less social unrest..... when EVERYBODY is doing well... then it makes for a safer country to live in....

      I'm glad that NOBODY in Sweden will lose their home over a catastrophic illness..... People in the USA can say the same...

      lastly.... people that are not paying taxes... this is because they are not making enough money.... they are not being paid enough.... had they been paid better... they would be paying taxes.... this is because so many companies these days pay lower wages.... so, in reality, we are subsidizing LOW wages for the corporations and companies....

      back in the 80's CEOs made about 30 times what the average worker made....

      NOW CEO's make 380 TIMES what the average worker makes....

      There seems to be something WRONG here.... CEO's are paying the bottom people MUCH less now than they used to..... could taxes be part of the problem????

      September 24, 2012 at 2:33 am | Reply
  21. CalDude

    We are heading towards Europe... Obamacare will speed us into Europe style economy.
    Tax the rich... tax the rich... soon we'll run out of the "rich" and money... and the politicians have us right where they want us, dependent and broke.

    July 12, 2012 at 9:40 am | Reply
    • justagurlinseattle

      Many countries in Europe have stronger economies than the USA has.....

      Norway and Sweden for example have much stronger economies.... this is because they have a stronger middle class....

      September 24, 2012 at 2:37 am | Reply
  22. d

    maybe when the French economy tanks because of this all you knuckleheads will think twice about your theory of nailing the right to give to the poor. You will get to see first hand how whack you fiscal theories are.

    July 12, 2012 at 9:47 am | Reply
  23. Marc L from NY

    Taxing the rich is a code for socialism. It is code for suppression of the masses. Instead of focusing on creating a larger middle class, which is the real benchmark of a Country's strength and it's people's freedom, the focus is shifted to those "horrible" rich people. In any society throughout history, the wealthy have always made up a small fraction of the population. It is just the natural order. Taxing them more will only cause them to leave. Then you find that all the money has dried up. So the solution becomes larger government. Right from the Marxist playbook. And how does it start? Class warfare, which we are seeing right now in this Country. Villianize the wealthy, turn the people against them and that is the justification used to tax them more. What better way to do that than to call them "1%"? That term is designed to make the rest of us feel empowered, after all, we are then the 99%. And now, to be in that 1% category, the qualifications are being lowered from 400K a year to 250K. Do you see the trend?

    July 12, 2012 at 10:03 am | Reply
    • Joseph

      The counterargument to your point is relatively simple. The "1%" moniker is used because that group controls what many would see as an inordinate amount of the total wealth of the nation. While your accusation of socialism is well founded, your fundamental assertion regardin the middle class is undermined by a number of points. The most obvious is that current trends have the "rich" (and by extension the "1%") expanding their economic domination thus proportionately increasing the income gap. If this trend continues without bound, the only result is the elimination of the middle class as an economic status. An example of this can be handily seen during the fuedal era in western history where virtually all resources were controlled by a tiny fraction of the population which resulted in the complete disappearance of the middle class altogether.

      That isn't to say that I believe that is where the situation is heading, but rather that there is a sound basis for the middle class villifying the "1%" as that group more obviously represents a threat to their economic well being than a benefactor as the latter's impact is nebulous at the best of times.

      July 12, 2012 at 12:10 pm | Reply
      • GreedKnight

        Thank you for having enough sense to look at history.

        July 12, 2012 at 2:03 pm |
  24. Patrick

    If, as you say, France's political system is a malaise, then what do you suggest?
    You are a knowledgeable man who produces a good analysis.
    It is not like you to make a derogatory remark without substance.

    July 12, 2012 at 10:22 am | Reply
  25. c s

    People do not invest in order to make jobs for other people, that is just a side affect of trying to make more money. Romney did not care if he made any jobs or fired people, the only thing that he cared about was making money on his investment. If you beleive otherwise, then you do not understand capitalism and how it works. No one invests in companies or industries unless they foresee that the company/industry is going to be profitable and hopefully will have increased sales. So why do increased sales happen? Answer: increased demand. So the real question is what is the best way of increasing demand? Cutting taxes for the poorest people and raising them on the richest. The poor will spend everything that they receive and in the end even the rich will benefit from a better economy. The rich always benefit the most from increased prosperity but they always will hate ANY taxes. That is human nature.

    July 12, 2012 at 10:50 am | Reply
  26. Saboth

    "35%. Do remember, though, state income taxes could add up to 11% on top of that." Yeah, and don't forget many people in the US pay 10, 20, 50% + of their pay for healthcare. So...45-50% European tax rates don't seem too bad by comparison.

    July 12, 2012 at 11:00 am | Reply
  27. GreedKnight

    So what creates Jobs?
    You obviously have to have a need more than just having people work. Consumers to consume the products produced by those jobs.

    How do you get consumers?
    People need to have disposable income to spend? wait we are loosing jobs and cutting back on pay and in doing so making it impossible to recover.

    How do you create a large group of consumers with disposable income to spend?
    Equal distribution of profits in a company. Channeling away the bulk of those profits from those at the top of the company and strengthening the base of that company. Set in motion things that will make peoples lives more manageable. More consumption of goods = more need for product = more need for jobs. The key thing that hurts this very simple solution is an unwillingness for those that are able to balance the equation. Tax increases are a solution to attempt to get the people who should be balancing the equation to balance it against their will by paying for the social welfare programs that they are creating the need for by not balancing the equation. Taxes are a band-aid not a solution. Corporate and business accountability is the solution. Not valuing a high bottom line over your workers. As it is they are working very hard at getting something for nothing or little. Government also needs to let business's do business and get their hands out of the jar and stop spending so much. But talking economic recovery not Debt reduction. most of the weight rests in the hands of the business to distribute profits in the company fairly.

    July 12, 2012 at 11:17 am | Reply
    • GreedKnight

      Higher taxes are a means to decrease federal debt but you need something to tax first so you are not in a position to destroy the base by making living and maintaining life more difficult to those who are already having difficulty.

      July 12, 2012 at 11:21 am | Reply
    • History Bear

      Nice ideas, but you ignore the human greed factor. The majority of corporate types have no social conerns other than how much they can have and how much they can deny others. Ideally a company would keep about 15% of its income as profit and the rest would be out as expenses such as payroll (incl. benefits) raw material etc.

      July 12, 2012 at 11:48 am | Reply
      • GreedKnight

        I didnt ignore greed I cited it as the problem.

        July 12, 2012 at 11:57 am |
  28. History Bear

    Simple answer- Flat tax on EVERYONE- 15-18 % , no tax breaks for money earned out of the country, no depreciation allowances for most natural resources- you usually get them for almost no payment- Unemployment is included. No credit for having kids etc. You keep more of what you make, everyone contributes and we put lots of people back to work fixing infastructure, makeing products in america etc. And yes you nit pickers, my spelling is lousy.

    July 12, 2012 at 11:45 am | Reply
  29. Rustyrake

    Interesting. I am one of the 1%. I own a small airplane. I pay property tax on it; I pay for the hangar, including taxes that support the local water and school districts; I get it inspected, and pay hefty fees for that; it needs regular maintenance from the local airport mechanic, etc. Next year the Bush tax cuts will expire. I will no longer be able to afford the plane. FIne, I will sell it (at a loss–I owe more to the bank than it's worth)–and all those tax payments I make to the county and cities, plus all the business for the mechanics, airport staff, etc, etc, will all go away. Sure it's a toy. Made in America. Supporting American towns and American jobs. Now, tell me again how taxing the "rich" doesn't hurt jobs."

    Dentate it sounds like you are in over your head. Your TDSR is a little too high from what I can see.

    July 12, 2012 at 12:10 pm | Reply
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